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SQM Research Residential Newsletter - 
Tuesday 19 May 2020
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Words for the Week

"There is always more goodness in the world than there appears to be, because goodness is of its very nature modest and retiring."

Evelyn Beatrice Hall
(wrote under the pseudonym S.G. Tallentyre)

Real Estate Realities 

How plunging net migration could hit rent, house prices

Over the past decade, the nation’s permanent population has grown by 3.7 million to more than 25 million – 60% was due to net migration from overseas.

But with international borders now closed in response to the health crisis, Australia’s overseas migration intake is expected to shrink by more than 85% in the next 12 months, severely impacting population growth, which will likely have a roll-on effect for housing demand as well as property and rent prices. 

Sydney and Melbourne will be the hardest hit

Net overseas migration in Australia – the net gain or loss of population through migration and emigration – was recorded at 239,601 people in the 2018/19 financial year, according to data from the Australian Bureau of Statistics.

Of this number, slightly more than 60% settled in Melbourne (32.3%) and Sydney (30.9%), making Australia’s two largest cities the most reliant on overseas migration for economic growth.

But the broader capital city figures only tell part of the story – migrants’ tendencies to settle in regions close to big cities suggest that inner areas of Sydney and Melbourne will take the brunt of the slowdown in migration.

 

AUCTION LISTINGS* for week ending 24 May 2020


CITY

Saturday

Rest of Week

 

STATE

Saturday

Rest of Week

Link

Sydney 229 41   All NSW 256 65 Auctions in NSW 
Melbourne 109 34   All VIC 126 35 Auctions in VIC 
Brisbane 27 21   All QLD 41 35 Auctions in QLD 
Perth 3 6   All WA 9 9 Auctions in WA 
Adelaide 3 8   All SA 3 9 Auctions in SA 
Canberra 19 17   All ACT 19 17 Auctions in ACT 
Darwin 1 0   All NT 1 0 Auctions in NT 
Hobart 0 0   All TAS 0 1 Auctions in TAS

*Note: To date, most state governments have announced the return to public open homes and on-site auctions this Saturday, some online auctions could be converted to on-site auctions or postponed to a future date.  The above counts of auctions represent most recent known auction dates for the coming week. 

AUCTION RESULTS for week ending 17 May 2020

Auction clearance rates in Sydney and Melbourne rose compared to the previous week and are at the highest levels since the week of the auction ban (25th March). However volumes remain at very low levels.
 
Sydney recorded an auction clearance rate of 47.1% with mid-week auctions faring better than Saturday results (51.1% verses 45.6%). Sydney volumes continue to be at very low levels with just 170 properties for the week. Still, the clearance rate was higher than the previous week’s 44.9%. Sydney has recorded five weeks in a row of rising clearance rates.
 
Melbourne recorded a clearance rate for the week of 42.3% with the Saturday results faring better than mid-week (44.4% verses 36.4%). Volumes were abnormally low at just 123 in total scheduled which was less than the previous week’s 133.
 
Looking forward to this week, Sydney has 270 scheduled which represents a lift on recent volumes. While Melbourne has 143 scheduled.


Full individual auction results can be found on our website: 

 

DISTRESSED PROPERTY OF THE WEEK

  10 / 15-17 Hart Drive, Constitution Hill NSW 2145

A split-level, 2 bedroom, 2 bathroom villa is for sale at Constitution Hill, some 6km from Parramatta’s CBD and 30km west of Sydney’s CBD.  The villa has been on the market since December 2019 for an initial price of $539,000 to $559,000.  The vendor has now slashed the price to $489,000 to $509,000 to ensure it sells quickly.  It last sold for $149,500 in June 1991.
 
The villa features an open plan lounge/dining area; 2 large bedrooms with built-in wardrobes and ensuite bathroom to the master bedroom. The second bedroom is large enough to accommodate a king-size bed.  The villa also has high cathedral ceilings, separate laundry, lock-up garage with internal access, a private sunny courtyard and has recently been re-carpeted and re-painted throughout.  Built in 1974, the villa is 160 sqm in size.
 
With a convenient location close to transport, shopping centres and schools it is also a quick access into Parramatta CBD and Westmead Hospital.
 
There is nothing to spend on this villa and it would be perfect for First Home Buyers as and Investors.


Asking Prices in the postcode have increased marginally by 0.1% over the last month, after a 12 month increase of 1.0% for units.  House asking prices for 3-bedders have also been increasing, up 4.2% over the month after a 6.8% increase over 12 months.
 

Asking weekly rents for this postcode show decreases currently experienced by most Sydney postcodes, with a 0.6% decrease over the month for units and 1.2% decrease for 3-bedroom houses.  In contrast, nearby Parramatta, postcode 2150, has seen increase in rents of 2.2% for units and 0.5% for 3-bedroom houses.  Sydney region asking rents for units have decreased by 0.9%.  The villa is currently advertised with an asking rent of $360 per week.  
 

Vacancy rates have increased to 5.1% from 4.5% in March.  Gross rental yield is currently 3.8% for units in this postcode.


Keep monitoring this market’s growth with SQM Research’s free property data. Also consider the SQM Property Explorer product for more in-depth data and property price estimator.




 
Louis Christopher's 2020 Housing Boom & Bust Report has now been released and is available for $59.95!

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Key features of the 2020 Boom & Bust report include:

  • Louis Christopher's personal take on the markets 
  • Capital city forecasts 
  • Main drivers of demand and supply at present and going forward 
  • All leading indicators such as stock on market, vacancy rates etc
  • All the possible scenarios that could play out next year 
  • Nearly every city and regional postcode covered re: property stats plus ratings outlook

If you are a real estate professional or a serious residential property investor, you will not want to miss this report!

If you are interested in where the market is heading on a national level, then this is the report for you from one of the most
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SQM RATINGS NEWSLETTER

Did you know that SQM Research doesn’t only provide residential property data, we also provide research on all asset classes.  We have data and analytics on over 10,000 funds in Australia.  To find out more and to subscribe to our Fund Data tool click here.

If you would like to subscribe to our Ratings Newsletter, click here.  The newsletter provides regular updates on all funds including ratings changes and media releases, and valuable Insights into the point of view of our analysts on a variety of ratings research related topics.  And it’s completely free!

 

SQM RESEARCH HOUSING INDEXES
 
SQM Research Weekly Asking Prices Index
Week ending: 19 May 2020  Asking Price  Chg on
  prev week
  Rolling month
% chg
 12 month
% chg
Sydney  All Houses  1,388.3 9.1  0.7%  14.0% 
All Units 706.7 -1.2  -0.2%  3.6% 
Melbourne  All Houses 1,043.9 -1.0  0.3%  11.9% 
All Units 563.4 0.9  1.0%  4.2% 
Brisbane  All Houses 639.1 -1.2  -0.5%  3.3% 
All Units 373.3 0.5  0.2%  0.4% 
Perth  All Houses 664.5 5.1  1.6%  0.5% 
All Units 376.1 1.5  0.8%  -2.2% 
Adelaide  All Houses 526.9 1.2  1.6%  2.7% 
All Units 308.0 0.5  0.4%  2.4% 
Canberra  All Houses 824.3 -1.6  0.4%  2.0% 
All Units 439.1 2.7  -0.7%  2.9% 
Darwin  All Houses 575.1 -3.5  -1.8%  -2.7% 
All Units 336.5 14.5  4.3%  -5.8% 
Hobart  All Houses 568.1 2.2  -2.1%  10.0% 
All Units 347.5 7.5  -2.8%  15.0% 
National  All Houses 598.2 1.2  -0.2%  5.6% 
All Units 390.1 -1.3  0.2%  4.0% 
Cap City Average   All Houses 999.1 5.3  0.9%  10.8% 
All Units 575.6 -1.4  0.3%  3.2% 

Next update: 26 May 2020

 

SQM Research Weekly Rents Index
Week ending: 12 May 2020     Rent     Chg on
 prev week 
  Rolling month
% chg
  12 month
% chg
Sydney  All Houses       647.7 -4.7  -2.9%  -6.1% 
All Units 480.5 0.5  -0.9%  -4.9% 
Melbourne  All Houses 534.6 -0.6  -1.7%  -1.4% 
All Units 407.0 -1.0  -2.0%  -3.7% 
Brisbane  All Houses 457.4 -0.4  -0.9%  -0.2% 
All Units 377.1 0.9  0.1%  1.0% 
Perth  All Houses 447.2 -0.2  -2.2%  0.0% 
All Units 344.2 -0.2  -0.9%  2.1% 
Adelaide  All Houses 408.0 0.0  0.1%  4.2% 
All Units 317.6 2.4  1.4%  4.9% 
Canberra  All Houses 628.0 -2.0  -3.0%  0.6% 
All Units 466.7 -0.7  0.6%  2.4% 
Darwin  All Houses 480.1 7.9  2.7%  -3.5% 
All Units 354.3 -3.3  -2.0%  -4.4% 
Hobart  All Houses 430.7 -1.7  -2.6%  0.9% 
All Units 396.2 6.8  0.8%  5.7% 
National  All Houses 440.0 -1.0  -0.5%  -0.7% 
All Units 366.0 -1.0  -0.3%  0.8% 
Cap City Average   All Houses 537.0 -2.0  -1.3%  -3.1% 
All Units 428.0 1.0  0.0% -3.2% 

Next update: 20 May 2020

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